Ulta Beauty (ULTA) Stock

Ulta Beauty Inc (NASDAQ:ULTA) shares are performing well in the S&P 500 Index (SPX) today, as investors await the company's third-quarter results, which will be released after the market closes on Thursday, December 5.

Even though Ulta Beauty had a disappointing year with a 31% drop so far, I am upgrading its stock to a strong buy because of the negative market sentiment and its undervalued status. The company's strong business performance, effective operations, and focus on benefiting shareholders have not changed, making it an attractive option for long-term investment. Analysis shows that ULTA is more than 25% undervalued, with a fair value estimated between $450 and $500.

Ulta Beauty (ULTA) closed at $360.47 on the most recent trading day, showing a decrease of 0.6% from its previous closing price.

Warren Buffett has recently reduced his investment in Ulta Beauty stock. Should you consider selling your shares?

Ulta Beauty's stock has fallen 22% this year, but it still looks appealing due to its reasonable valuation and strong growth opportunities from new store openings, loyalty programs, share buybacks, and overall industry growth. I have changed my recommendation from "Strong Buy" to "Buy" because the share price has increased since my last update and earnings per share estimates have decreased. The company aims to open 200 new stores, enter the Mexican market, and boost loyalty membership, which could lead to future growth and a potential recovery in share price to over $500.

I have changed my rating for Ulta Beauty stock to Buy because of their exciting plans for store expansion and the fact that the market is undervaluing them. Their aggressive strategy, which includes opening stores in Mexico, should lead to better growth than what management is currently predicting. Even though the market is feeling negative right now, I think Ulta can achieve revenue growth of 4-6%, meaning their shares are about 14-15% undervalued.

Ulta Beauty (ULTA) closed at $380.54 on the most recent trading day, showing a decrease of 1.23% from its previous closing price.

In the most recent trading session, Ulta Beauty (ULTA) finished at $382.91, which is a decrease of 0.26% compared to the day before.

Michael Baker, a senior research analyst at D.A. Davidson, appears on CNBC's 'The Exchange' to talk about retail earnings and stocks, as well as the trends he observes in consumer spending and other related topics.